Are Your Prices Set for Profitability?

September 24, 2019 by OSYB Staff

You are almost ready to open the doors for business. Now, you are ready to set the prices for your products or services. How do you that? Intuit QuickBooks shares some items for you to consider to set prices that maximize your profit and meets your customers’ needs:

• understand your profit margin – net income / sales, and this ratio explains the profit earned on each dollar of sales
• your industry in some ways pre-determines your profit margin and you can check this out by looking at public companys’ annual reports
• check out competitors’ pricing
• your product or services’s perceived value by customers, if a customer feels that what you provide cannot be met by others, you may be able to demand higher pricing
• experiment with price increases with certain products or services and analyze the response
• stay on top of your cost analysis and see if you can increase profit margins by sensibly reducing costs without diminishing quality
• look at company-wide profits
• if your costs increase, it makes sense to increase your prices to maintain profit margins

Stay on top of your pricing and regularly check your prices against the industry, your costs, sales prices, profit margins, etc.

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For full article: How to set prices for your small business: A beginners guide to profitability

Image Credit: Deposit Photos